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Multinational companies have started getting notices from State GST Authorities, even as the Centre is talking about lowering compliance burden. These notices are for initiating department driven audits wherein team of officers would undertake comprehensive verification of details and records being maintained by a tax payer. These notices are relayed with conducting audit for FY 2017-18.

“Different states are issuing multiple types of notices with no uniformity and consistency in the information sought from the taxpayers,” an industry executive told Business Line.

Another executive said while vide such notices, regular details such as GST returns, financial statements, income tax returns, and cost audit reports are being called, the authorities are also seeking certain details which appear to be extraneous such as walk-through of internal controls for accounting, purchases, outward supplies, and stock.

Meanwhile, a senior Finance Ministry official said Centre will talk to the States to find the reason and try to resolve, so that taxpayers do not face problems.

Though such notices were framed in February and March, but due to Covid pandemic, these could not be delivered and are now being issued. One such notice issued by Gurugram GST Commissioner, as seen by Business Line, asked a service company to submit self-attested copies of 20 statutory and tax compliance documents/records and 37 types of other records. These documents include copy of application for GST registration, registration certificate, GSTR forms along with challan, details of e way bills, Annual Report, Income Tax Returns along with Audit Report, Form 26 AS, lists of input service and capital goods suppliers, Contracts, MOUs, list of activities undertaken by the company, purchase order, sales book, stores ledger, finance ledgers, credit notes, debit notes, etc.

The notice asked the company to depute a nodal person, and has given 15-day time period. “In case of failure to comply with this notice, it would be presumed that you are not in possession of such book of accounts and proceedings as deemed fit may be initiated as per provisions of the Act and rules made there under against you without making any further correspondence in this regard,” the notice read.

A notice by Tiruchirapalli Commissioner asked a company to submit Annual Report & Director’s Report, Profit & Loss Account, Balance Sheet, Trial Balance, monthly returns and assessee profile beside responding to detailed questionnaire. The questionnaire, spread over seven pages, cover questions related with supply of services (service agreements, correspondences with the customers, quotation/tender files, cost sheets of services, price lists, income register/debit notes, job cards/work statements), receipt of inputs (vendor/supplier list, tender/quotation documents, purchase orders, bank account), and input/input services used in exempted services (costing of outward supplies, job cards/ work statements).

“It appears that while the industry at large is still getting accustomed to frequently changing GST laws and compliance mechanism, companies will also have to spend another round of time and effort on preparing for the departmental audits,” another company executive said.

Thursday, November 5, 2020

Circular No. 136/06/2020-GST Dated : 03.04.2020

Rule 36(4) of CGST Rule restricts the claim of ITC in GSTR 3B. According to this rule ITC claim is restricted to 10% above the ITC as per GSTR 2A

Considering the lock down situation, the Government has relaxed the provisions of Rule 36(4). Therefore, for the GST returns relating to periods from February 2020 to August 2020, ITC as per Books can be claimed without considering the ITC as per GSTR 2A. This short term relaxation is a very welcome move for the Trade & Industry.

However, the ITC claimed has to be matched in a consolidated manner with GSTR 2A before filing GSTR 3B of September 2020. for Filing GSTMonthly returns .

Saturday, April 4, 2020

𝐃𝐞𝐜𝐥𝐚𝐫𝐚𝐭𝐢𝐨𝐧𝐬 𝐦𝐚𝐝𝐞 𝐛𝐲 𝐅𝐢𝐧𝐚𝐧𝐜𝐞 𝐌𝐢𝐧𝐢𝐬𝐭𝐞𝐫 𝐢𝐧 𝐩𝐫𝐞𝐬𝐬 𝐜𝐨𝐧𝐟𝐞𝐫𝐞𝐧𝐜𝐞 𝐚𝐬 𝐚 𝐫𝐞𝐬𝐮𝐥𝐭 𝐨𝐟 𝐂𝐎𝐕𝐈𝐃𝟏𝟗 𝐩𝐚𝐧𝐝𝐞𝐦𝐢𝐜


FY 18-19 last date for income tax returns extended to 30.06.2020. For the delayed payments interest rate reduced from 12 to 9 percent.

Interest on delayed deposit of TDS reduced to 9 percent from 18 percent. 30.06.2020

Aadhar and Pan Linking date extended to 30.06.2020 from 31.03.2020 Vivad Se Vishwas Scheme extended to 30.06.2020. No additional 10 percent charge till 30.06.2020.Any due dates regarding issue of notice/intimation/approval/sanction order/applications/ reports/ filing of appeal/any compliance by taxpayers/ benefit of capital gains/ Benami Law which was getting over by 20.03.2020 has been extended to 30.06.2020.


Last date for filing returns for March ‘20, April ‘20, May ‘20 and composition returns extended to 30.06.2020.

Companies having less than 5 crore turnover no interest, no late fees and no penalty. Bigger companies - no late fees and penalty - however, interest at 9 percent.

Date for opting for composition scheme extended to 30.06.2020

Customs and Central Excise

Sabka Vishwas scheme further extended to 30.06.2020 from 31.03.2020. People who pay during the extended period will not have to pay any interest.

Customs clearance till 30.06.2020 will operate 24/7 during COVID-19.

Wednesday, March 25, 2020


In respect of MCA Registry 2020, a moratorium applicable 1.04.2020 to 30.09.2020. Moreover, no additional fees for late filing.

For holding board meetings: time relaxed by a period of 60 days for next two quarters.

CARO: Applicability of companies order 2020 shall be made applicable from FY 2020-21 instead of FY 2019-20. 

For the year 2019-20, if the independent directors have failed to hold even one meeting - it will not be considered a violation.

Newly Incorporated Companies

Requirement to file declaration of commencement within 6 months of business - additional time of 6 more months.

A company director who doesn’t comply with the requirement of minimum residency in India (has not stayed in India for 182 days or more) - it shall not be treated as a violation under Companies Act.

Debentures: minimum requirement of 15% investment extended to 30.06.2020.


Threshold for default of 1 lakh rupees has been increased to 1 crore rupees. In case the situation doesn’t improve till 30.04.2020, then the Finance Minister may consider suspending Sec 7, 9 and 10 of IBC for 6 months.


ATM Withdrawals free of cost from any other banks ATM for next three months.

No minimum balance requirement fees

Wednesday, March 25, 2020

Revenue Department instructs field formations to attach bank accounts of #GST non-compliant taxpayers

Non Compliance includes:

1. Pending GSTR3B of more than 3-4 months

2. Non payment of taxes

Friday, February 14, 2020

Govt plans GST lottery offers of Rs 10 lakh-Rs 1 cr for encouraging customers to ask for bills

The government is planning to introduce lottery offers between Rs 10 lakh and Rs 1 crore under the GST to encourage customers to take bills while making purchases.

Central Board of Indirect Taxes and Customs (CBIC) member John Joseph said every bill under the goods and services tax (GST) regime will provide a chance to the customers to win a lottery and that would act as an incentive for them to pay the tax.

"We have come with the new lottery system. Every bill under GST is supposed to be a price-winning lottery ticket. It will go for a draw and price are so high that people will say that by not saving 28 per cent, I have a chance of winning Rs 1 crore or Rs 10 lakh. It is a question of changing the consumer behaviour," Joseph said at an Assocham event.

As per the plan, the purchase bill would be uploaded on a portal and a draw would be held automatically and the winners would be informed.

Wednesday, February 5, 2020

The CBIC vide Notification No. 07/2020 – Central Tax dated February 03, 2020, which notified the due dates for filing of monthly outward supply return i.e. GSTR – 3B for the period January 2020, February 2020 and March 2020, in the following manner as described in the below table:-

Sr. No Particulars A registered person, whose principal place of business is in Due Dates

1. Annual Turnover of Rs. 5 Crore and above in the previous financial year.

(Rs. 5Cr and > above) -- 20th of Every Month without late fees.

2. Taxpayers having an aggregate turnover of up to Rs. 5 Crore in the previous financial year.

(Up to Rs. 5 Cr) Chhattisgarh, Madhya Pradesh, Gujarat, Maharashtra, Karnataka, Goa, Kerala, Tamil Nadu, Telangana or Andhra Pradesh or the Union Territories of Daman and Diu and Dadra and Nagar Haveli, Puducherry, Andaman, and the Nicobar Islands and Lakshadweep. For Jan 2020:-February 22, 2020

For Feb 2020:-  March 22, 2020,

For March,2020:-April 22, 2020, respectively

Taxpayers having an aggregate turnover of up to Rs. 5 Crore in the previous financial year.

(Up to Rs. 5 Cr) Himachal Pradesh, Punjab, Uttarakhand, Haryana, Rajasthan, Uttar Pradesh, Bihar, Sikkim, Arunachal Pradesh, Nagaland, Manipur, Mizoram, Tripura, Meghalaya, Assam, West Bengal, Jharkhand or Odisha or the Union territories of Jammu and Kashmir, Ladakh, Chandigarh, and Delhi. For Jan 2020:-February 22, 2020

For Feb 2020:-  March 22, 2020,

ForMar2020:-     April 22, 2020, respectively

Wednesday, February 5, 2020 Read More

The government is looking to get services professionals such as plumbers, electricians and beauticians listed on online platforms onto the Goods and Services Tax Network, in what could be yet another move to bring gig economy workers into the fold of the formal workforce. The Department for Promotion of Industry and Internal Trade ( DPIIT) is considering making it mandatory for online marketplaces such as UrbanClap, HouseJoy and Bro4u to only engage service professionals who have a GST Number or GSTIN, senior government officials in the know of the matter told ET. 

While the majority of plumbers, electricians, individual fitness trainers that make use of such online platforms will have a turnover of less than Rs 40 lakh annually, exempting them from paying GST, the government’s move to mandate GSTIN is more in line with having a database of such professionals. “Today, these professionals go into people’s houses and there’s absolutely no way for us to identify them,” said a senior government official. “While they may not have to pay GST or make the quarterly filings, if they are registered on the network, we can trace them if there’s any untoward event,” said a government official who did not want to be named. He added that companies such as UrbanClap may be asked to keep a log of all the jobs done by these services professionals, which were facilitated through their platform. UrbanClap declined to comment as there was no formal communication from the government on the issue. Calls and messages to executives from Housejoy and Bro4u did not yield a response.

“There are several issues that we are examining like consumer safety and protecting the rights of these workers,” said another senior government official, who added that the DPIIT was currently evaluating the matter. “Even today, there is voluntary GST registration, so it’s not something very big that we are asking them to do.” Discussions to get services professionals listed onto the GSTN come ahead of the ecommerce policy, which is expected to come out before the close of the current fiscal. Sources told ET that while the updated policy may dilute sections on data sharing, it could further define rules for online marketplace, inventory-led models and hybrid models. The ministry of labour and employment is mulling bringing out regulations around the social security of gig economy workers. In its draft Code on Social Security, 2019, the ministry has proposed that all gig workers should be entitled to life and disability cover, health and maternity benefits, old age protection and other benefits.


Monday, January 20, 2020 Read More

#GSTMONTHLYRETURN #3B #Nov 2019 Return

#GSTR 3B Nov 2019 Due Date Extended from 20 Dec , 2019 to 23 Dec , 2019

Saturday, December 21, 2019

The 38 Meetings of the GST Council met under the Chairmanship of the Union Minister for Finance & Corporate Affairs Smt. Nirmala Sitharaman here today. The meeting was also attended by the Union Minister of State for Finance & Corporate Affairs Shri Anurag Thakur besides Finance Ministers of States & UTs and senior officers of the Ministry of Finance. The GST Council recommended the following

1. Grievance Redressal Committees (GRC) will be constituted at Zonal/State level with both CGST and SGST officers and including 

representatives of trade and industry and other GST stakeholders (GST practitioners and GSTN etc.). These committees will address the grievances of the specific/ general nature of taxpayers at the Zonal/ State level.

2. The due date for annual return in FORM GSTR-9 and reconciliation statement in FORM GSTR-9C for FY 2017-18 to be extended to 31.01.2020.

3. Following measures would be taken to improve filing of FORM GSTR-1:

i. Waiver of a late fee to be given to all taxpayers in respect of all pending FORM GSTR-1from July 2017 to November 2019, if the same is filed by 10.01.2020.

ii. E-way bill for taxpayers who have not filed their FORM GSTR-1 for two tax periods shall be blocked. 

4. Input tax credit to the recipient in respect of invoices or debit notes that are not reflected in his Form GSTR-2A shall be restricted to 10 percent of the eligible credit available in respect of invoices or debit notes reflected in his Form GSTR-2A. 

5. To check the menace of fake invoices, suitable action to be taken for blocking of fraudulently availed input tax credit in certain situations.

6. A Standard Operating Procedure for tax officers would be issued in respect of action to be taken in cases of non-filing of FORM GSTR 3B returns.

7. Due date of filing GST returns for the month of November 2019 to be extended in respect of a few North Eastern States.

8. The Council also approved various law amendments which will be introduced in Budget 2020.

Thursday, December 19, 2019

CAIT seeks extension of last date to file GST annual return to October 31

Traders' body CAIT on Thursday asked the finance ministry to extend the last date for filing annual GST return by two months to October 31.

The last date to file the return is August 31. In a letter to Finance Minister Nirmala Sitharaman, the Confederation of All India Traders (CAIT) said prescribed Form GSTR 9 for filing annual return "is still very complicated".

According to it, several information sought in the Form are new and in spite of best efforts traders are finding it difficult to comply with the same.

Friday, August 23, 2019

Fifteen percent taxpayers have been able to file an annual return under Goods and Services Tax (GST) amid fast approaching due date owing to complexities raising worries among dealers fraternity, who are now demanding exemption from filing annual returns for first-year 2017/18. In wake of lacklustre response and hurdles faced by taxpayers in filing annual return forms 9, 9A and 9C, Ahilya Chamber of Commerce and Industry has urged the government to exempt taxpayers from filing annual returns for the first year. Ahilya Chamber of Commerce and Industry general secretary Sushil Sureka said, “Except some big corporates, details demanded an annual return form is next to impossible for small traders to provide due to which they are not able to file GST returns. As everything is online and we have been filing monthly returns, software should auto compile annual return data.”

There are four lakh taxpayers in Madhya Pradesh registered with GST department, of which not more than 15 percent have been able to file annual returns so far, officials from state GST department said. Lack of provision for rectification in annual return in case of any error and complex nature of forms are delaying return filing, said, industry experts. Some industries associations have also demanded an extension of the last date and to allow rectification in returns. The last date for filing GST annual returns is August 31, that has been extended once from July 31. An official from State GST department wishing anonymity said, “Response is not great with just 15 percent taxpayers able to file annual returns till date. Looking at the slow pace we are anticipating that the last date for filing the returns will get extended again.”

Wednesday, August 21, 2019 Read More

Parle Products Private Limited said that product demand for its products has diminished in the past two quarters. In an exclusive interview to Bloomberg Quint, Mayank Shah, category heads at Parle Products said, “Consumers have become more value-conscious during the times of slowdown in the last six months. Consumers are not buying enough. Offtake from the shops is getting affected. The number of shops stocking these products is the same, but the number of products being sold from these shops is going down due to weakening consumer demand,” His remarks came after Varun Berry, managing director, Britannia Ltd, in a post-earnings conference said the consumers are thinking twice before buying even a ₹5 product. He indicated towards a “serious issue in the economy”.

“We’ve only grown 6 percent and the market is growing slower than that,” Varun Berry, managing director at the maker of Good Day and Tiger biscuits, said. Britannia Industries market shares have declined more than 3 percent since it announced its first-quarter results on August 9, 2019.  Mayan Shah of Parle Products held higher slabs in Goods and Services tax and lack of adequate government stimulus responsible for the slowdown in demand. “Imposing higher taxes on biscuits bought typically by lower-income consumers will definitely impact sales. The government needs to spruce up demand. There has also been a long pending demand to reduce GST on biscuits priced at ₹100 per kg or below.” “These biscuits were taxed at only 12-14 percent under the previous excise and value-added tax regime. Under GST, they are priced at 18 percent. This forces companies to increase prices, impacting sales,” said Shah

Wednesday, August 21, 2019 Read More

In its first review of the performance of the goods and services tax (GST), the Comptroller and Auditor General (CAG) on Tuesday pointed to several gaps in the new regime and said even after two years, system-validated input tax credit (ITC) through "invoice matching" was not in place and a non-intrusive e-tax system remained elusive. "The complexity of the return mechanism and the technical glitches resulted in rollback of invoice-matching, rendering the system prone to ITC frauds. Without invoice-matching and auto generation of refunds, assessments, etc on the whole, the envisaged GST tax compliance system is non-functional," the CAG said. The audit pointed out the vulnerability of the system to fraudulent ITC claims. It found the system allowed unrealistic and erroneous claim of ITC of IGST by one taxpayer, representing 79% of total ITC claim by all taxpayers for a month, thus exposing the vulnerability of the system to fraudulent ITC claims.

"The system of payment and settlement of tax that was envisaged for GST was based on 100% invoice-matching and availment of input tax credit, as well as settlement of IGST on the basis of invoice matching. Neither is possible as of now, as an invoice matching system has not kicked in," the CAG said. This is the first audit report of CAG on GST based on review of the system for the financial year 2018 19. The auditor said the extent of changes, having to be now undertaken, as well as the suspension of key aspects of the system, pointed to inadequate coordination among the stakeholders such as department of revenue, Central Board of Indirect Taxes and Customs (CBIC) and GSTN as well as failure to try out the system adequately before rollout.

Thursday, August 1, 2019 Read More

GSTN releases offline tool of new GST return for trial run

Goods and Services Tax Network (GSTN) on July 30 released trial version of offline tools of GST forms related to supply of goods and services. The offline tools have been released for Annexure of supplies (GST ANX-1) and Annexure of Inward Supplies (GST ANX-2), GSTN, which is the IT backbone of the indirect tax regime, said in a statement.

These two forms would be part of the proposed GST Return filing system under which a taxpayer would have to file FORM GST RET-1 (Normal) or FORM GST RET-2 (Sahaj) or FORM GST RET-3 (Sugam) on either monthly or quarterly basis.

Wednesday, July 31, 2019

GST Highlights 25th July 2019

Now, interest to apply only on net cash liability of unpaid GST The amendment to section 50 was proposed in the Union Budget on the July 5, 2019, and the Finance Bill 2019 was passed in the Lok Sabha on the July 18, 2019. 

The Union Budget 2019 has provided relief to GST-registered taxpayers with several new updates. One such amendment relates to the interest on the delayed payment of GST liability. This is a big relief for taxpayers, because, until this amendment was passed, interest has always been charged on the entire amount of tax paid after the due date 

Thursday, July 25, 2019

Bombay HC sets aside AAAR order denying ITC on ‘cash carry vans’ for fresh disposal in accordance with law

Recently, the Hon’ble HC of Bombay has admitted the writ petition challenging the order dated August 6, 2018 passed by Appellate Authority for Advance Ruling (“AAAR”), Maharashtra ruling that the input tax credit (“ITC”) is not available on purchase of motor vehicle/vans to carry cash. HC set aside the AAAR order and directed to consider the submissions made by the petitioner and give its conclusion thereon duly supported by the reasons.


M/s. CMS Info Systems Limited (“the Petitioner”) is having cash management network pan India. During the course of providing the cash management services, the Petitioner is, inter alia, engaged in managing cash circulation through transporting cash from currency chest to bank branches through the security vans popularly known as “cash carry vans”.

The Hon’ble AAAR, Maharashtra vide order dated August 6, 2018, observed that ITC is not available on purchase of motor vehicles i.e. cash carry vans, which are purchased and used for cash management business and supplied post usage as scrap. It was observed that since the cash carry vehicles are deployed to carry cash and bullion for other than for numismatic purposes, the cash carried by them is to be construed as money and not goods.

Being aggrieved, the Petitioner challenged the order of AAAR, claiming that there was a flaw in the decision making the process as the order failed to deal with the principal submissions of the assessee (after recording the same in the impugned order) viz. ITC would be available in respect of motor vehicles used for transport of money, in view of the definition of ‘goods’ and ‘money’ in the GST law.

Issue involved:

Whether ITC is available on purchase of motor vehicles i.e. cash carry vans which are purchased, used for cash management business and supplied post usage as scrap?


The Hon’ble High Court of Bombay in Writ Petition No. 5801 of 2019 dated July 9, 2019, noted Petitioner’s submission that the ‘goods’ would include ‘money’ as the cash being transported by them in motor vehicles was not used as a legal tender. Therefore, it was to be treated as ‘goods’ and Section 17(5) of the CGST Act, 2017 at the relevant time had excluded the benefit of ITC in respect of motor vehicles, unless used for transport of ‘goods’.

Accordingly, the HC observed as under:

• The aforesaid principal submission though recorded, has not been dealt with at all in the impugned order. This there is a flaw in the decision making process of AAAR.

• Reliance placed in the impugned order upon the press note issued subsequent to a GST Council recommending to allow ITC in respect of the motor vehicles used for transportation of money, would not by itself lead to the conclusion that prior thereto, money was not included within the definition of ‘goods’. This has to examined in terms of the definition of 'goods' and 'money' found in the CGST Act.

• The entire issue before the AAR that whether the vans/motor vehicles in which the Petitioners were transporting cash, would be money for the purpose of Section 2(52) of the CGST Act, has not been dealt with in the impugned order.

• It is necessary for the Authority to consider the submissions made by the parties before it and give its findings in the context of the submissions made. Ignoring a submission would render the order vulnerable to judicial review by this Court.

Hence, the Hon’ble HC set aside the impugned order and directed the AAAR to consider the submissions made by th

Thursday, July 18, 2019 Read More

Case Law




Summary of the case

The writ-application has been filed seeking quashing and setting aside of the press release dated 18th October 2018 to the extent that its para 3 purports to clarify that the last date for availing the input tax credit relating to the invoices issued during the period from July 2017 to March 2018 is the last date for the filing of the return in Form GSTR-3B for the month of September 2018.

It is submitted that the aforesaid clarification is not in consonance with Section 16(4) of the CGST Act/GGST Act which provides for the last date for taking the input tax credit.

Section 16(4) of the CGST Act/GGST Act provides that the last date for taking the input tax credit in respect of any invoice or debit note pertaining to a financial year is the due date of furnishing of the return under Section 39 for the month of September following the end of the financial year or furnishing of the relevant annual return, whichever is earlier.

However, considering technical glitches in the GSTN portal as well as difficulty faced by the tax payers it was decided to keep filing of GSTR-2 and GSTR-3 in abeyance. Therefore, in order to ease the burden of the taxpayer for some time, it was decided in the 18th GST Council meeting to allow filing of a shorter return in Form GSTR-3B for initial period. It was notified vide Notification No.44/2018 Central Tax dated 10th September 2018 that the due date of filing the return under Section 39 of the Act, for the months of July 2017 to March 2019 shall be subsequently notified in the Official Gazette.

Thus, in view of the above, the impugned press release dated 18th October 2018 could be said to be illegal to the extent that its para-3 purports to clarify that the last date for availing input tax credit relating to the invoices issued during the period from July 2017 to March 2018 is the last date for the filing of return in Form GSTR-3B.

The said clarification could be said to be contrary to Section 16(4) of the CGST Act/GGST Act read with Section 39(1) of the CGST Act/GGST Act read with Rule 61 of the CGST Rules/GGST Rules.

With the above, this writ-application stands disposed of for Detail

Thursday, July 11, 2019 Read More

Changes in respect of GST

Updation of Aadhar No. is compulsory for all existing and new registrations.

Taxpayers having annual turnover of less than ₹5 crore can now file quarterly returns in GST.

An electronic invoice system is proposed that will eventually eliminate the need for a separate e-way bill.

Fully automated GST Refund module shall be implemented; multiple tax ledgers to be replaced by one; invoice details to be captured in a central system.

"Section 31A" The Government may, on the recommendations of the Council, prescribe a class of registered persons who shall provide prescribed modes of electronic payment to the recipient of supply of goods or services or both made by him and give option to such recipient to make payment accordingly, in such manner and subject to such conditions and restrictions, as may be prescribed.”

 In "Section 50" The interest on tax payable in respect of supplies made during a tax period and declared in the return for the said period furnished after the due date in accordance with the provisions of section 39, except where such return is furnished after commencement of any proceedings under section 73 or section 74 in respect of the said period, shall be levied on that portion of the tax that is paid by debiting the electronic cash ledger.”.

 In "Section 49" A registered person may, on the common portal, transfer any amount of tax, interest, penalty, fee or any other amount available in the electronic cash ledger under this Act, to the electronic cash ledger for integrated tax, central tax, State tax, Union territory tax or cess, in such form and manner and subject to such conditions and restrictions as may be prescribed and such transfer shall be deemed to be a refund from the electronic cash ledger under this Act.

Monday, July 8, 2019

The CBIC has issued a Circular No. 102/21/2019-GST dated 28 June 2019, in which clarification has been made regarding leviability of GST on Additional/Penal Interest in case of late payment of Equated Monthly Instalments (EMI).

Generally, there are two options involving EMI as prevalent in the industry -

1. X purchases a phone of Rs. 40,000/- from Y. Y gave an option to pay the amount in instalments i.e. Rs. 11,000/- for every four months (Rs 11,000 * 4 = Rs. 44,000). The same has to be paid on 10th day of every month and in case of default an additional / penal interest amounting to Rs. 500/- per month will also be payable. 

2. X purchases phone of Rs. 40,000/- from Y. For making payment to Y, X took loan from Mr. ABC Ltd. of Rs. 40,000/- at interest of 2.5% per month. The terms of the loan from M/s ABC Ltd. allows X a period of four months to repay the loan and an additional / penal interest @ 1.25% per month for any delay in payment.

Here it is pertinent to mention that as per sub-clause (d) of sub-section (2) of section 15 of the CGST Act, the value of supply shall include "interest or late fee or penalty for delayed payment of any consideration for any supply". Further in terms of Sl. No. 27 of exemption Notification No. 12/2017- Central Tax (Rate) dated the 28 June 2017, "services by way of (a) extending deposits, loans or advances in so far as the consideration is represented by way of interest or discount (other than interest involved in credit card services)" stands exempt. 

Accordingly, the taxability as determined by the aforesaid circular in both scenarios is as follows -

In scenario 1, since the transaction is solely between the X and Y, therefore, in terms of sub-clause (d) of sub-section (2) of section 15 of the CGST Act, the penal interest would be taxable and it would form part of the value of mobile, irrespective of the manner of invoicing.

In scenario 2, The additional / penal interest is charged for a transaction between X and M/s ABC Ltd., and the same is getting covered under Sl. No. 27 of Notification No. 12/2017- Central Tax (Rate) dated 28.06.2017, and therefore would be exempt from GST. The value of supply of mobile by Y to X would be Rs. 40,000/- for the purposes of levy of GST.

It has been further clarified that the transaction of levy of additional / penal interest does not fall within the ambit of entry 5(e) of Schedule II of the CGST Act i.e. "agreeing to the obligation to refrain from an act, or to tolerate an act or a situation, or to do an act", as this levy of additional / penal interest is covered under the definition of "interest".

Wednesday, July 3, 2019

Importers do not need state-wise registration under GST regime

Importers with godown or those which store goods at customs warehouses in different states got relief from the advance authority of ruling (AAR) under the goods and services tax (GST) regime.

The AAR, Maharashtra, in two recent rulings, said that these companies do not need a separate registration in each state and that a registration where their headquarters are located would be enough. These firms can sell products in different states and raise invoices against their head offices, it ruled.

Wednesday, June 26, 2019

Cross-country offices of companies to now come under GST: Report

The Center will soon bring services provided by the office of a company in one state to an office in another state under the purview of the goods and services tax (GST), the Economic Times reported.

Those eligible can claim the input tax credit and a circular sanctioned by the GST Council which would enumerate the particulars would be sent out soon, the paper stated. Companies from the power, healthcare, liquor, and education sectors would, however, be exempt.

Wednesday, June 26, 2019

The Government vide Press Release dated June 24, 2019 proposes to integrate a FASTag Bank Mechanism with e-way bill and Logistic Data Services to track movement of goods and check GST evasion. The Government is contemplating integration of E-Way Bill mechanism of GST with FASTag System of National Highway Authority of India (NHAI). The aspect of Logistic Databank integration with FASTag System is being examined.

A Committee of Officers comprising of officers from Central Government, State Governments, GSTN (Goods and Services Tax Network), NIC (National Informatics Centre), GST Council, to examine the issue of use of RFID data for strengthening of E-Way Bill mechanism under GST, was formed by GST Council. The representatives of NHAI and NPCI (National Payments Corporation of India) were also co-opted in the committee. The Committee of Officers has submitted its report to the GST Council, recommending integration of FASTag system with E-Way Bill mechanism. The recommendations of the Committee are under consideration by GST Council. Further, with regard to integration of FASTag with LDB, a committee comprising of Central Board and Indirect Taxes and Customs (CBIC), NHAI & its associates, NPCI, GSTN, NIC, Delhi Mumbai Industrial Corridor Development Corporation (DMICDC) & its associates was formed to examine the feasibility of the same. The committee has submitted its report, which is being examined. This was stated by the Union Minister of Finance & Corporate Affairs, Smt. Nirmala Sitharaman in a written reply to a question in Lok Sabha.

Tuesday, June 25, 2019

Manufacturer of exempt supplies requires to take #GST Registration if liable to pay tax on reverse charge basis

M/s. Jalaram Feeds is engaged exclusively in manufacture and sale of animal feeds, making certain quantity of taxable supply of goods transport service by way of reverse charge mechanism would fall within scope of Section 24 of the #CGST Act for the purpose of registration and hence would be required to obtain registration under the #CGST Act in order to discharge his duty liability under reverse charge.


M/s. Jalaram Feeds (“the applicant”) is engaged exclusively in manufacture and sale of compound animal feeds vide HSN Code: 2309 which are exempt from tax vide Entry No. 102 of the Notification No. 2/2017 Central Tax (Rate) dated June 28, 2017. Further, the applicant also requires Services form Goods Transport Agency (“GTA”) like any other business.

Issue Involved

Whether the firm is liable to take registration under Section 24 or is exempted from registration under Section 23 of Central Goods and Services #Tax Act, 2017 (“CGST Act”)?

Applicant’s Interpretation of Law

The applicant is of the view that they are not required to obtain registration under the #CGST Act as they are engaged exclusively in the business of supply of goods or services or both that are not liable to tax or wholly exempt from tax as provided under Section 23 of the CGST Act.

Further, a person who is engaged exclusively in the business of supplying goods or services or both that are not liable to tax or wholly exempt from tax is not liable for registration under Section 23 of the CGST Act.

Thus Section 23 is not contrary to Section 22 of the CGST Act but is clear expression of the intent of Section 23. Therefore, there is no force in the contention of the applicant that Section 23 is a specified Section and independent and not over ruled by Section 24 of the CGST Act.


The Hon’ble AAR, Maharashtra vide Order No. GST-ARA-110/2018-19/B-38 dated April 10, 2019 held that the applicant is liable to take registration as per the provisions of Section 24 of the CGST Act.

Further the applicant would go out of the scope of Section 23 of the CGST Act due to making of certain quantity of taxable supply of goods transport service by way of reverse charge mechanism and would fall within scope of Section 24 for purpose of registration and hence would be required to obtain registration under CGST Act in order to discharge his duty liability under reverse charge notwithstanding the turnover limit specified in Sub Section (1) of Section 22 of the CGST Act.

Citation: [2019] 106 taxmann.com 241 (AAR - MAHARASHTRA)


Tuesday, June 25, 2019

The Hon’ble AAR, West Bengal vide Order No. 06/WBAAR/2019-20 dated June 10, 2019 held that GST paid on the purchase of motor vehicles for supplying rent-a-cab service is not admissible for credit in terms of Section 17(5)(b)(i) of the GST Act.

Citation: [2019] 106 taxmann.com 108 (AAR-WEST BENGAL)

Tuesday, June 18, 2019


The Telangana High Court has ruled that no input tax credit (ITC) is available unless GST returns are filed and a taxpayer is liable to pay penalty on the entire liability. The ruling is expected to have a significant impact on all businesses that use tax credits available on inputs and raw materials to reduce payment in cash. "...until a return is filed as self-assessed, no entitlement to credit and no actual entry in the electronic credit ledger takes place. As a consequence, no payment can be made from out of such a credit entry," Justices V Ramasubramanian and P Keshava Rao said in a case involving Megha Engineering & Infrastructures and GST Authorities.

The company had delayed filing the GST returns from July 2017 to May 2018 when its tax liability added up to Rs 1,014 crore. It had ITC of Rs 968 crore and it claimed that the shortfall was to the tune of Rs 45 crore. While the tax authorities demanded 18% interest on the entire amount, Megha Engineering argued that interest should only be calculated on the net tax liability, after deducting ITC from the total liability. The court upheld the department's view. "The ruling has very wide implication as almost all taxpayers, who delayed filing returns and have paid interest only on cash payment of tax and not on the GST amount set off by them through ITC. The issue will open floodgate of litigation and demands of interest by GST officials are imminent. Even CAs while auditing Annual GST Returns, which have to be filed by June 30, may be required to point out short payment of interest due to delayed set off," said tax lawyer RS Sharma.


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